Alzadon v. Highlands Hosp. Corp. Inc. (Summary)

INCOME GUARANTEE – BREACH OF CONTRACT

Alzadon v. Highlands Hosp. Corp. Inc., No.2012-CA-000102-MR (Ky. Ct. App. Aug. 8, 2014)

The Court of Appeals of Kentucky affirmed a lower court’s entry of summary judgment for a hospital’s breach of contract claim against a surgeon, holding that the facts show the surgeon breached the terms of his employment agreement. The employment agreement included an income guarantee, so long as the surgeon did not have his privileges reduced, suspended, or terminated. Within the first two months of the surgeon’s employment, the hospital received six complaints about his performance. The hospital restricted his privileges, and required him to complete a surgical mini-residency in order to have his full privileges reinstated. After five months without the surgeon completing the surgical mini-residency, the hospital decided to suspend his privileges and sent him a letter informing him he could request a hearing within 30 days. The surgeon responded with a letter from a physician in another state who agreed to provide the required training and the hospital lifted the suspension and allowed the surgeon to complete the surgical mini-residency with this physician. However, in order to be accepted into the physician’s program, the surgeon intentionally concealed his standing with the hospital. When this was discovered, the surgeon was terminated from the program and never completed the required surgical mini-residency. The hospital then terminated the surgeon and set a schedule for the surgeon to pay back his guaranteed income of $305,000. The surgeon paid the hospital a lump sum of $75,000, but never made another payment. The hospital brought this action seeking to recover the rest of the guaranteed income, as well as attorney’s fees.

The court held that all facts show that the surgeon breached the employment agreement with the hospital, and the surgeon failed to present any evidence that suggests otherwise. The surgeon acknowledged that he did not complete the required additional training and intentionally concealed the nature of his training requirements to the prospective program. Additionally, he acknowledged that he did not exhaust all of the administrative remedies available to him. Lastly, the court held that the hospital was entitled to reasonable attorney’s fees pursuant to the employment agreement.